Will preparation is probably the last thing you think about on a given day – and on the rare occasion that it does, I imagine you quickly eradicate those thoughts from your mind!
Two things have come together in my thoughts recently that raise a vitally important question. One of them is humorous; the other, unfortunately, is not.
First, I accompanied my two sons, Chris and Jadon, on a camping trip. Chris has a lot of experience in the great outdoors; he loves to get out there even for a couple of weeks at a time. It’s like his second home. And if it wasn’t for him I think I’d have been in trouble! (The photo shows him working on lunch for Jaden and me.)
I remember camping years ago, in my youth, but that was a very different scenario. It was under the stars on a beautiful beach in Curacao, the Caribbean island where I grew up. This time we were out in the Texas woods, which have their own beauty but are definitely a wilder place to camp out.
In the end, we had a great time together that I wouldn’t trade for anything. But I do remember thinking at some points that I might not survive and make it back home! The question that automatically comes to your mind is: “Did I leave everything in order?”
That’s actually a really good question to seriously think about from time to time. Which brings me to the second thing that I was thinking about.
The untimely death of Prince was headline news all over the world for a time. He has been attributed as one of the most influential songwriters/musicians of all time, and he sold more than 100 million records – generating a fortune of hundreds of millions of dollars.
And then the news broke that Prince died without having prepared a will. He was 57 years of age.
That seems incredible, but he is not the first wealthy celebrity to do so. In fact, there have been quite a number, including Jimi Hendrix, Bob Marley, Kurt Cobain, Tupac Shakur, “Sonny” Bono, Barry White, James Brown and Amy Winehouse.
The reason we are shocked is because of the large estates that are involved with these very famous people, but they are only the high profile faces of a big, scary problem in America. A survey in 2015 revealed that 64% of Americans don’t have a will.
Most of those surveyed (60%) said that they just hadn’t got around to will preparation. Many thought that it wasn’t urgent, and some found it depressing to think about. Can I humbly suggest that if you really want to be depressed, think about some of the things might happen if you die without a will? The fact is, you effectively hand over decision-making control to the government, which can mean:
• If you have dependent children, someone else may decide who raises them.
• Less money left in your estate to go to people and causes that you care about.
• Time wasted in probate, and a major hassle for your family or friends.
• The potential for fighting over what you would have wanted.
“Because you never know when the day before … is the day before. Prepare for tomorrow.” – Bobby Akart
The good news is, however, that these problems can be simply avoided. Will preparation does not need to be too complicated or costly.
Where There’s a Will…
Will preparation actually involves two things: (1) Leaving instructions about what you want to happen with your money and possessions after you die, and (2) Making your wishes known in the event that you should become ill and unable to handle decisions yourself.
Many people don’t understand the difference between several legal instruments that are commonly used.
1. A Will. (Otherwise known as a Last Will and Testament). This is used to specify your final wishes, appoint someone to carry them out, and to transfer your assets to the person(s) that you choose. You can also name guardians for your dependent children.
You should note that a will alone does not necessarily avoid the process of probate. If you own property in your name alone, there must be a court process to “prove” the will, and satisfy creditors. In order to avoid probate, you might consider a “Living Trust”.
2. A Revocable Living Trust. (Otherwise known as an “Inter vivos” Trust). This simply replaces a will as your core estate plan document. A living trust avoids probate for any assets held by your trust, facilitates ease of transfer or distribution of the trust assets without court involvement, and retains privacy. You remain the “beneficiary” of all your assets until your death, and the term “revocable” means that you can change or cancel it at any time while are still competent to do so.
3. A Living Will. (Otherwise known as an Advanced Directive or Health Care Directive). Many people confuse this with a Last Will and Testament. A living will basically allows you to make decisions in advance about life support and organ donation – and, very importantly, to name someone to manage your healthcare if you are no longer able to do so.
4. A Durable Power of Attorney. This delegates authority to another person. The authorities that are delegated can be broad and general in nature, or the powers may be limited. Unlike your will, which only takes effect upon your death, a Power of Attorney is in effect only while you are alive. The durable nature of the instrument means that the authorities delegated can continue to be exercised during any period you suffer incapacity.
Imagine, for a moment, that you should be in an accident that results in you being hospitalized in a coma. Without a Durable Power of Attorney, nothing can be done with your assets until you die. Your funds are stuck. For this reason a DPOA may be the most important estate planning document to have in place, particularly for married couples.
I hope that this abbreviated summary on will preparation is helpful. There is a lot more information that can be simply explained to you, and a lot of help available for getting prepared for something you may rather not think about – but others may wish that you had.